Ford hopes to eliminate about 21,000 jobs or 20% of its blue-collar work force over the life of a new collective bargaining agreement with the United Auto Workers union, sources familiar with the company’s plans have told Reuters.
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The news agency noted that, when it unveiled a multi-year turnaround plan to recover from a deepening financial crisis in January last year, the world’s second largest vehicle maker said it planned to cut about 12,000 hourly jobs, nearly all represented by the UAW.
But sources close to the company told Reuters it was now looking at shrinking even further its blue-collar ranks, which include workers at its former auto parts subsidiary Visteon Corporation.
Ford hopes to cut roughly 5% a year over the duration of a four-year contract with the UAW, the report added, and the cuts would be achieved through attrition with the company’s total blue-collar work force cut to around 73,000 employees from 94,000, the sources told Reuters.
The news agency said the cuts in the Ford work force have not been presented as a demand in the contract talks that Ford and other Detroit automakers opened with the union two weeks ago – in bargaining that could extend at least to the end of September – and Ford spokeswoman Anne Marie Gattari told Reuters she would not comment on the negotiations.
Reuters said that Ford’s plan would be bolstered by the fact that the company has a large number of factory workers who are at or near completing 30 years of service, when they will be eligible for retirement.
At Ford’s assembly plant in Lorain, Ohio, for example, almost one-third of the work force is eligible for retirement, Reuters noted.
The news agency said that, though Ford’s push to cut jobs through attrition could represent a major challenge for the UAW, which has been hurt by the loss of more than half its membership since 1979, it is not without precedent as the union allowed General Motors to use attrition to scale back its work force repeatedly under contracts over the past decade, and more than 17,000 factory jobs were eliminated at GM alone under terms of the current UAW contract with little or no protest from the union’s leadership.
The news agency said many analysts and labour experts believe the UAW will endorse major cost-cutting efforts at Ford and its cross-town rivals as a trade-off for keeping generous health care and retirement benefits.
Reuters noted that Ford officials have said the UAW will have to lift a four-year ban on US plant closings so it can proceed with its restructuring plan by eliminating excess production capacity.
